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GM’s Employee Discount

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You’ve heard of this deal on the television and on blogs. General Motors [GM] is advertising an “Employee Discount for Everyone” sale, in which they are offering their vehicles for the same price an employee would pay, “not a cent more.”

Is it really a good deal? If you participate, most likely you will be paying 3 to 4 percent lower than the dealer’s invoice price. Some of the prices were previously unreachable through negotiation, and people have been taking advantage of this sale, to the company’s benefit. But according to David Ellis, there is still room for negotiation, especially on models that aren’t selling quickly.

The sale has worked well for GM. Their market share was up 30 percent earlier this month, mostly taken from Chrysler. While the promotion is scheduled to end after Independence Day, many people predict the offer will be extended.

Can this deal be related to the announcement that GM plans to lay off 25,000 workers between 2005 and 2008? After all, that’s 25,000 people who can no longer officially claim the employee discount. Nevertheless, it’s easy to call this offer “insensitive.”

Here’s how GM has performed in the market during the incentive:

The “real” employee discount is likely a much better deal for the buyer than the discount being advertised to consumers. Dealership employees often pay dealer cost or below, but I don’t know what GM factory workers or corporate employees pay. Their discount is probably significant.

If you’re planning on buying a car, The Motley Fool has a complete guide which should be read thoroughly.

Two updates: It’s official, this offer has been extended through August 1. Also, this post has been featured on the Carnival of Personal Finance #3.

Updated June 20, 2014 and originally published June 29, 2005.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

avatar 1 Anonymous

I just saw that Ford is now doing the same thing (offering employee discount to all customers).

avatar 2 Luke Landes

Update: News on the New GM deal.